On October 20, 2025, the United States Trade Representative (USTR) determined under Section 301 of the Trade Act of 1974 that Nicaragua’s acts, policies, and practices related to abuses of labor rights, abuses of human rights and fundamental freedoms, and dismantling of the rule of law are unreasonable and burden or restrict U.S. commerce. The USTR determined that Nicaragua has “exploited its own workers resulting in unfair conditions of competition, confiscated the property interests of domestic and foreign religious institutions and U.S. persons or businesses, and created a high-risk environment for U.S. companies investing and conducting business in the country.”
As a result of the determination that Nicaragua’s acts, policies, and practices are actionable, the USTR has proposed a range of responsive actions, including but not limited to (i) suspension, withdrawal, or prevention of application of benefits of the Dominican Republic-Central America-United States Free Trade Agreement (CAFTA-DR) to Nicaragua, and (ii) additional duties of up to 100 percent on some or all products of Nicaragua over a period of 12 months.
The USTR is seeking public comments on these proposed actions. Any written comments must be submitted by November 19, 2025, via the online USTR portal at: https://comments.ustr.gov/s/. The docket number for comments is USTR-2025-0006. The USTR requests that commenters specifically address whether imposing increased duties on particular sectors or suspending or withdrawing concessions on a particular sector, would be practicable or effective to obtain the elimination of Nicaragua’s acts, policies, and practices or would cause disproportionate economic harm to U.S. interests, including small- or medium-size businesses and consumers.
A copy of the Federal Register Notice setting out the USTR’s actionability determination and proposed action is available here. The full USTR Report is available here. For additional background, see Thompson Hine Update of December 11, 2024.